PBoC injects money into financial system

The People’s Bank of China injected US$2.8 billion (RMB17 billion) into the financial system on Tuesday to calm market jitters still being felt from the recent credit crunch, Financial Times reported. It was the first injection of liquidity via seven-day reverse repurchase agreements since February 7. The relatively small amount was intended to prevent cash rates from drifting too high, and the impact was immediate. The seven-day bond repurchase rate, a key gauge of short-term liquidity in China, fell 0.14 percentage points to 4.98% on Tuesday. Investors have been nervous about a liquidity squeeze since June’s credit crunch.